Nikkei up for 4th day; briefly tops 40,000

TOKYO — The Nikkei stock index rose Tuesday for the fourth straight trading day and briefly climbed above the 40,000 mark for the first time in three months on optimism about the U.S. economic outlook.

The 225-issue Nikkei Stock Average ended up 304.75 points, or 0.77 percent, from Friday at 39,910.55. The broader Topix index finished 17.37 points, or 0.64 percent, higher at 2,723.57. Japanese financial markets were closed Monday for a national holiday.

On the top-tier Prime Market, gainers were led by insurance, bank and electric appliance issues.

The U.S. dollar mostly remained firm in the upper 149 yen range in Tokyo on tempered expectations of additional large interest rate cuts by the Federal Reserve following recent solid U.S. economic data, dealers said.

On the stock market, the Nikkei index reclaimed the 40,000 level from the opening, but its upward momentum slowed in the afternoon as investors locked in on recent gains.

The benchmark index's rally was driven by strong earnings reports from major U.S. financial firms late last week and persisting hopes that the Fed will cut interest rates further despite recent solid economic data, brokers said.

"The market was lifted by optimism about the U.S. economic outlook, but there has been a sense of overheating after rapid gains since October," said Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co.

Brokers said whether the index can stay above 40,000 will depend on how many listed Japanese companies revise upward their full-year earnings outlook as they report results for the fiscal first half, as well as the outcome of the Oct. 27 general election.

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